Published on November 14, 2013

Mesnac buys majority stake in test measurement firm

Tags

Tire, Suppliers

AKRON—Chinese machinery maker Mesnac Co. Ltd. has purchased a majority interest in Test Measurement Systems Inc. for an undisclosed amount.

TMSI supplies test and measurement products for a variety of industries. Products for the tire industry include high speed uniformity machines, tire endurance test machines, tire force and moment systems, modular add-on equip-- ment, tire load and deflection, rolling resistance machines, and slip and camber systems.

Mesnac previously didn't make those types of machines. The company now can offer customers a more complete product line.

"We're kind of at the tail end of this with laboratory testing machinery. (Mesnac didn't) have that capability," said TMSI CEO Gerald Potts.

Mesnac supplies a wide range of tire manufacturing equipment, from raw material mixing to final product testing. The firm has research facilities in the U.S., United Kingdom, Europe, and Qingdao and Beijing, China, along with sales and service operations in North and Latin America, Europe, Asia-Pacific, India and China.

"We can quickly expand TMSI's sales network to Asia, Europe, South America and China," said Jerry Gu, Mesnac director of strategy and marketing. "China, India and South America will be fast growing markets for tire testing equipment."

Mesnac is targeting Brazil, Russia, India and China as regions for the technology.

Potts said that the automobile industry has not developed as fast in Asia as it has in the U.S. In some cases, the industry still is establishing, and he foresees the region needing all the tools the U.S. has.

"While the American auto industry and tire industry has good testing, as time goes on we are developing higher and higher testing in that test line, and it's being shipped to Asia," Potts said. "It's going to create a ricochet market back in the U.S. because the technology is getting ahead of what is already installed in U.S. tire companies."

Potts will stay on for at least three more years as part of the transition.

"That's part of the reason for selling the company," Potts said. "I'm now 70 years old, and somebody has to take over this job at some point."

His son, Ryan, works at TMSI, but Ger-ald said his son would rather focus on the programming side of the business than get involved in management.

Potts wanted Ryan to have a stable position while at the same time secure a succession plan to provide customers stability.

The agreement with Mesnac accomplished all of those goals, he said.

"Mesnac has resources that we did not have as a small company," Potts said. "We depended heavily on cash flow. Things that we could think of we'd have to wait until we had the resources to implement or try out or have an actual order to build.

"A lot of customers don't want to do that. They want to see if it works before they buy something."

Mesnac would not release financial details of the investment, but Gu said all of TMSI's employees will be integrated into Mesnac.

"TMSI and Dr. Potts have a really good name and reputation in the tire industry," Gu said. "Dr. Potts is an expert and professor in tire testing technology."

Mesnac's successful purchase of Wyko Tire Technology Inc. in 2011 gave the firm confidence to break further into the North American market, Gu said.

Wyko specializes in the production of tire-building drums and associated ancillaries.

Gu said Mesnac now has the resources to launch a research and development facility in North America to expand the use of TMSI's technology and that the company is exploring its options to do so.

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